South Korea’s insurers expand optional retirement programs due to digital transformation and increase in mergers and acquisitions

The insurance sector is expected to witness an increase in retirements by employees who choose to leave on their own accord rather than being subject to layoffs due to the ongoing changes in the digital landscape and the surge in mergers and acquisitions, as revealed by industry insiders.

As businesses go through the process of combining their operations, there is a shift towards encouraging employees to take up voluntary retirement packages instead of facing involuntary job cuts.

Hanwha General Insurance, in the midst of finalizing its merger with Carrot General Insurance set to be completed by September, is anticipated to adopt this approach. The older workforce at Hanwha might be incentivized to retire voluntarily, given that Carrot General Insurance has a notably younger workforce.

Industry analysts speculate that around 20% of the workforce is typically affected by staff reductions during mergers. With fixed labor costs, insurers consider restructuring as an essential measure to enhance operational efficiency.

Likewise, Tongyang Life Insurance and ABL Life Insurance are also expected to introduce voluntary retirement programs as Woori Financial Group is on track to complete the acquisition of both companies by July 1st.